Different by Design
October 1, 2007
Different by Design
By Kathie Canning, contributing editor
Advance Brands attributes its remarkable growth to making a point of difference — in everything it does.
Sometimes fitting in means everything. Anyone who has known — or been — an adolescent with braces, glasses or a few extra pounds surely knows how painful being “different” can be.
In business, however, differentiation is often a requisite for success. And that’s a reality Oklahoma City-based Advance Brands LLC understands very well.
This processor of fully cooked value-added meat and poultry items — formed in 2001 as a 50-50 joint venture between Advance Foods Co. of Enid, Okla., and Wichita, Kan.-based Cargill Meat Solutions (formerly Excel Corp.) — is decidedly different from its competitors. And that’s by design.
“Obviously, we’ve got to be competitive,” says Tom Harpenau, Advance Brands’ president and a 40-year industry veteran. “But what we really try hard at is making a point of difference.”
And that point of difference can be seen in everything from Advance Brands’ unique approach to retail customer relationships to the company’s lofty expectations for its Orange City, Iowa, plant operators. (See “Living Lean,” p. 80, for a look at plant operations.)
But Harpenau — who began his career with Harker’s, the foodservice meat company that originally built the Orange City facility — stresses that it’s Advance Brands’ employees that truly make the company stand out from the crowd.
“We have it on the sign outside [the plant] — ‘Our employees make the difference,’” says Harpenau. “We need to walk that walk. That’s something we spend a lot of time on, having the right people in the right places and making sure we’re treating them right.”
Bill O’Neill, vice president of business development and a 16-year food industry veteran, admits that the company is not a good fit for everyone.
“We’re not an organization that you can hide in — from day one, at your training program, we ask, ‘What have you done today?’” he says. “You’ve got to be able to contribute. That sounds really good, and it sounds like most people would just love that, but we have found that it’s not for everybody.”
Advance Brands’ strategy certainly has paid off. Sales for its Fast Fixin’ and Fast Fixin’ Restaurant Style products reached roughly $170 million in 2006. The company now boasts literally hundreds of SKUs in supermarkets and club stores across the country — sold in standup pouches for the freezer, as well as trays and even modified-atmosphere packaging (MAP) for the refrigerated case. Growth has been so strong, in fact, that the company recently invested $20 million to expand its Orange City plant. Completed in 2005, the plant’s new “mega” line handles popcorn chicken, chicken nuggets, chicken strips and meatballs and increases the facility’s overall annual production capacity by 45 million pounds.
“I think a lot of our success has been in listening to the customer to find out what they want,” stresses Billy McPherson, vice president of sales & marketing. “We developed a company based around going in and finding out what the retailer really wants — and developing products based on them knowing the business — and that’s worked really well.
“There’s a cost involved in that decision because obviously you’ve got to beef up R&D, and you’re not going to have one product running 16 hours a day,” he adds. “But once we made that decision and committed to it, we partnered with a lot of key retailers to find out what they think would work out there with the consumer. That’s really how we’ve grown the business.”
Not just nuggets
Advance Brands’ carefully planned product mix is yet another differentiator that has worked in the company’s favor.
“In 2001, [fully cooked] was a fairly new category,” O’Neill says. “Today, just about every poultry company has entered into it. You still have the same amount of retail space — that hasn’t grown significantly over the last five years, but you’ve got a lot more competitors vying for the space.”
That’s why the company never just puts something on the shelf and expects it to sell. Instead, it custom-designs programs for its retail customers.
“That’s the secret to Advance Brands,” O’Neill contends. “We don’t have the deep pockets of some of the bigger companies that can just throw an item out and blast it across the country. We really have to take it on a market-to-market basis. We have an organization and a system in place to be able to do that.”
New products born out of customer relationships have quickly helped alter the company’s public perception as well — from just a “chicken nugget company” into a provider of numerous high-quality, convenient meat and poultry items for all parts. But at least one new concept — Fast’ Fixin’ Restaurant Style — can be credited solely to Advance Brands and its management team’s observations.
“We saw a real opportunity with what was growing out there in food, which was fast-casual restaurants,” says McPherson, whose 20-plus years’ experience in the industry encompasses stints with such companies as Wilson Foods and Sara Lee. “We decided we needed a brand to go after that segment of the business. Having parents that operate in the foodservice arena has helped us a lot because we can see trends in foodservice, and we’re able to take that and put it into our Fast Fixin’ Restaurant Style brand.”
The Fast Fixin’ Restaurant Style line sports foodservice-inspired fully cooked offerings such as Country Fried Steaks with Gravy and Tomato Basil Chicken Breasts. As Bridget Little, senior manager of consumer marketing, puts it, the offerings are similar to what “mom used to make” — and what today’s time-pressed consumers would cook, too, if they had time.
“Sixty-four percent of consumers don’t know what they’re having for dinner at 4:30 p.m. — the freezer has become our new pantry,” says Little, who has 18 years of consumer marketing experience. “A lot of us are not going home and cooking chicken dumplings from scratch — we’re pulling them out of the freezer.”
Advance Brands’ management team is excited about one of its newest products — Fast Fixin’ On the Go Cheeseburgers. Designed to capture the fast-food eating experience, each full-size cheeseburger goes from freezer to microwave to table in just a minute. The cheeseburgers are individually wrapped and are packaged six to a bag.
“Developing the product was actually more challenging than we thought it would be because of the bread,” says McPherson. “It’s a great kids’ item. And our tests that we did early with some retailers, to see what the response would be, came out very well.”
Also on the product-launch agenda this year were boneless wings, says McPherson, which are extremely popular on the foodservice side.
The company also has begun to make a subtle addition to some of its packaging.
“Where possible, we’re calling out the health benefits on the bag — zero grams trans fat, great source of protein, some of the things you’re seeing in the cereal aisle right now,” Little says. “I think it’s going to be a huge trend in packaging. We want to make sure that every product that we make is as healthy as possible.”
Full steam ahead
In planning for the second half of the company’s first decade in operation, Advance Brands’ management team was not content to bask in its accomplishments. Instead, the team laid out some rather remarkable goals.
“We had the startup of a line in 2005 and some things going on in 2006 that were not favorable to us,” notes Harpenau. “But we’re looking for double-digit growth in the next year and in the following three years.
“Back in July of 2005, we set out as a group of officers and put together what we called ‘Where we want to be in five years,’” he continues. “That would be doubling our business in a five-year period. So we started [working on that goal] at the end of 2006.”
Getting there will not be without its challenges, Harpenau admits, but he believes his team has what it takes to overcome any obstacles that come along the way.
“We asked everybody to try to identify their strengths and weaknesses, and tried to help them with their weaknesses and build on their strengths,” he says. “We restructured within the sales/marketing area, giving top managers areas of responsibility along with the regional managers to drive the business and make sure we don’t drop the ball.”
Customer service — one of the company’s pillars — also will continue to help drive desired growth.
“Last year, our fill rate was hovering around 99 percent,” says McPherson. “There’s a cost to do that, but we decided early on that customer service was going to be one of our pillars. … We just don’t short orders; it’s so important to our customer service.”
Advance Brands’ employees — this time, its plant operators — can take much of the credit for that accomplishment, stresses Tim DeLarm, vice president of engineering and a 23-year industry veteran.
“They take ownership of the products that customers take delivery of,” he says. “They understand what the customer wants; they understand the product and know enough about the process where they feel comfortable shutting down the line to fix any problem that might come up.”
The company also understands the importance building brand awareness plays in growth plans, and has a number of initiatives in place to enhance its relationship with consumers.
Although private label accounts for about 15 percent of Advance Brands’ products, it will not be the focus of future growth. The company instead will continue to take a “targeted approach” to private label, says O’Neill, selecting projects carefully.
“I never see private label becoming a huge part of our business,” he says. “But having said that, we want to partner with those who we think are really, really good retailers.”
And not just for private label — yet another requisite for growth will be partnering with new retailers. In fact, Advance Brands keeps a “most wanted” list of retailers it aims to reach.
“We need to do a better job of finding out what their needs are,” says O’Neill. “Our goal with our retailers is to make them a hero, and to do that, we’ve got to be a resource. And the only way we can be a resource to that customer is to really know that customer.”